It's almost a certainty that within days or at most a couple of weeks the news of the day will be...

• Without more money from the government, GM and Chrysler will be bankrupt, taking several large auto suppliers and Ford with them as the result. What should we do?
  
• The banks, particularly the big ones, have huge amounts of unrecognized losses on their books. If the new Treasury Secretary's "comprehensive stress test" reveals these illusory assets, as such an analysis almost certainly will, such assets qould have to be written off,almost certainly causing a large number of well-known banks to be insolvent--Citibank is one that heads the list. The Bank of America isn't in much better shape. What should the government do about this problem?

Before you answer "nothing...let 'em fail", consider the consequences. Consider everything from the resulting unemployment to the void that would occur in the financial system so important to our economy as well as that of the rest of the world. Without the big banks, there is no means to finance companies such as the Fortune 500. With the equity markets so weakened by the crisis and the void in the debt markets that would result from the failure of one or two large U.S. banks, our economy would likely grind to an even slower pace than currently exists, if that is even imaginable. Protectionism would run rampant. Countries would make sure that their banks served their national interests and no one else's. Foreign trade would slow precipitously. As the world's largest exporter by far, the U.S. would be hurt the worst. The extent of the results are almost unimaginable.

Should the U.S. government finally admit that they have nationalized the banking system and the auto industry--we have, you know, with the massive amounts of money already injected into the banks, insurance companies, GM and Chrysler as the result of the original TARP. These companies owe the government amounts that are multiples greater than their market capitalization and would take many, many years to repay, maybe decades. The same is true of AIG, the country's largest insurance company and Freddie and Fannie, who between them own or guarantee more than half the home mortgage loans in the country. In fact, the government has taken over Freddie and Fannie, placing their management people in those companies to replace those fired when the TARP funds were injected.

Not that it's a certainty that we could even borrow enough to finish the job of nationalizing the banking system, auto companies, insurance companies and home mortgage providers, but is that the direction we're headed? Do we have any alternatives? What are they?